Bureaucratic glitch torpedoes 'buy American' law for TSA

WASHINGTON — When freshman Rep. Larry Kissell, D-N.C., successfully amended the economic stimulus bill last winter to prevent airport-security uniforms from being made overseas, the textile industry lauded his activism in protecting American jobs.

A bureaucratic glitch has put much of the Kissell Amendment on hold, however, potentially threatening hundreds of manufacturing jobs and putting tens of millions of domestic manufacturing dollars at risk.

For now, Transportation Security Administration uniforms, which would have to be made completely in the United States under the new law, still can be manufactured in Mexico, Canada or Chile, all because of an oversight that happened years before Kissell even was elected.

The three nations never were told that airport security uniforms might be included in a "buy American" clause someday. So until new international deals can be negotiated, those countries are free to bid on new textiles.

"Obviously, this is a matter that needs to be fixed," said Auggie Tantillo, the executive director of the American Manufacturing Trade Action Coalition, an organization that's dedicated to preserving domestic manufacturing jobs. "The value of the Kissell Amendment is undermined by this glitch."

The Office of the U.S. Trade Representative has said it's working quickly to repair the damage, but officials have no estimate of how long it'll take to negotiate new deals with Mexico, Canada and Chile.

Until then, the pain could be especially acute in North Carolina, which has lost more than 10,000 textile jobs in the past year, and the rest of the textile-heavy Southeast. The fabric for the TSA's uniforms already is made in the United States, by Milliken & Co. in Spartanburg, S.C., but the clothing is assembled in Honduras and Mexico.

Nationwide, the industry lost more than 60,000 jobs and 44 manufacturing plants in a year, according to Kissell's remarks last winter on the floor of the House of Representatives.

The textile industry learned of the latest setback in June, just as the TSA was about to put out a bid for new uniforms, to be paid for with money included in the stimulus bill. The TSA said in a statement Tuesday that it was going ahead with the purchase.

'I thought this was fairly locked up," said Peter Hegarty, the president of Tuscarora Yarns in Mount Pleasant, N.C. Hegarty said he understood the oversight but worried about competition from Mexico and Chile.

"If anything was being made in Chile, for instance, I'm confident there would be zero U.S. content in those uniforms," Hegarty said. "They have a vibrant textile industry."

In an interview Tuesday, Kissell said he was disappointed at the news but that the Department of Homeland Security had warned all along that his idea would be difficult for the bureaucracy.

For now, Kissell is trying to mitigate the damage to textiles. His staff has worked with the agency to cut the TSA's planned five-year contract for uniforms down to one year. He hopes that will give the Office of the U.S. Trade Representative enough time to negotiate new agreements.

The Department of Homeland Security agency also has agreed to give 50 percent of the contracts to U.S.-based small businesses, up from its usual 40 percent.

The story of the Kissell Amendment illustrates the complexities of international trade agreements, in which a single omission can affect an industry years down the line.

Kissell worked in North Carolina textile mills as a salesman and manager for 27 years before he later became a high school teacher. He pledged that once he was elected he'd protect the domestic industry.

The Kissell Amendment, essentially a "buy American" extension of a law that pertains to military uniforms, was inserted into the massive, $787 billion economic-stimulus bill in February.

It requires all uniforms for the Transportation Security Administration — which runs airport security — and the Coast Guard to be produced and assembled domestically. It's unclear whether any parts of Coast Guard uniforms are manufactured overseas.

The textile industry praised the new law. Kissell estimated in February that it could save 5,000 jobs for every $100 million spent on U.S.-made uniforms.

The oversight has its roots in the creation of the Department of Homeland Security after 9-11. Nearly two dozen existing agencies were cobbled together into a new department. A new agency, the Transportation Security Administration, was created as well.

With the new department, the Office of the U.S. Trade Representative was charged with telling all the United States' trade partners that it reserved the right to have a "buy American" agreement for airport security uniforms in the future.

Because of an oversight, however, the USTR omitted the notice in two free-trade agreements: a U.S.-Chilean pact and the North American Free Trade Agreement, which includes Canada and Mexico.

A spokeswoman said the USTR was consulting with TSA officials and reviewing its options on what to do now.

Because the issue probably will require reopening trade negotiations, the deal could take time, textile industry leaders say.

"We're optimistic that an agreement can be reached and we'll get them covered," said David Trumbull, the vice president of international trade at the National Textile Association in Boston.

In the meantime, Kissell introduced legislation last Friday that would extend the "buy American" requirement to other Department of Homeland Security agencies, such as the Border Patrol, customs agents and immigration enforcement.

That bill would expand the Berry Amendment, which requires military uniforms to be made in the United States.

Kissell said he expected opposition because his bill would upset current free-trade agreements. President Barack Obama warned last winter that he didn't want the United States to become overly protectionist in its "buy American" provisions.

"It's simply that it's homeland security," Kissell responded. "Look at our Border Patrol. Do we want people to have counterfeit Border Patrol uniforms? We want the security of having them made here."

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